The Australian Bureau of Statistics’ (ABS) latest monthly building approvals data has shown building approvals to be down across almost all the jurisdictions in the March Quarter 2023 compared to the same quarter last year.

The data release covers detached houses and multi-units for all states and territories for March.

“The first quarter of 2023 saw the lowest number of building approvals since 2012 just as population growth reaches a record high,” Housing Industry Association (HIA) senior economist Tom Devitt says.

“Detached house approvals declined by 2.9% in the month of March to be 15.0% lower than in the same month last year.

“This continues the long-lagged response of Australian homebuyers to the Reserve Bank of Australia’s interest rate hiking cycle, with further declines expected in the coming months.

“The adverse impact of last year’s cash rate increases is still to fully flow through to the official data. Further cash rate increases this year will have only added further weight to these declines.”

In seasonally adjusted terms, decreases were led by New South Wales at -34.1% and Victoria at -26.6%, followed by Western Australia with -14.9%, Tasmania with -10.8% and South Australia at -5.7%, while Queensland saw an increased of 8.6%.

In original terms, the Australian Capital Territory saw a decline of 35.3% along with the Northern Territory being down 19.1%.

“Multi-unit approvals in 2023 have recorded their lowest levels since 2012. The combination of construction cost blowouts, labour uncertainties, increased compliance costs and taxes on investors has seen approvals for multi-units stall,” Tom says.

“These disappointing approvals numbers are occurring as population growth surges with the return of overseas migrants, students and tourists.

“This imbalance will see the affordability and rental crisis deteriorate further.”